2023 Solar Incentives Guide for Aberdeen, NJ - Tax Credits & Rebates

What Solar Tax Credits, Incentives, and Rebates are Available in Aberdeen?

Source: https://www.dsireusa.org/

The term "solar incentives" covers a range of financial incentives put in place to make installing and using solar panels more affordable. This is done to encourage people to switch to renewable energy. Various kinds of incentives, including cash back, discounts or monthly utility bill credits, might be available to you. Certain incentives may be offered by the New Jersey government, by your utility company or by county or municipality, while other incentives are federal. You might qualify for any of the following types of solar incentives:

• Tax Credits: Tax credits decrease, dollar-for-dollar, the amount of income tax you owe the government. These are different from tax deductions.
• Rebates: A rebate is a partial refund credited to your account after you've paid for your solar system. Rebates might be offered by your local utility company, your state or your county. The rebates are usually applied before tax credits are calculated.
• Solar Renewable Energy Certificate (SREC): SRECs can be sold to your utility company (or other buyers) for money that normally counts as part of your taxable income. In most cases, a certain (small) threshold of energy production must be met before your solar system is eligible for SRECs or similar performance-based incentives. SRECs and similar incentives are generally handled by your state government.
• Net Metering: Net metering becomes relevant once your solar panels are up and running. If you have a net metering agreement in place with your Aberdeen utility company, the company will subtract the value of the excess energy produced by your solar system from your monthly utility bill. In some places, this credit is dollar-for-dollar, while in other areas you may make back a percentage of the value.
• Tax Exemptions: These can come in the form of property tax exemptions, which would allow you to exclude the value of your solar system when calculating the taxes you pay on your house. You may also qualify for an exemption on sales tax at the time of purchase.

Federal Solar Incentives

When someone says "solar incentives," you likely think of federal incentives first. One of the incentives that most people are likely to be familiar with is the Federal Solar Investment Tax Credit (ITC). The ITC is a tax credit for a given percentage of the cost of your solar system.

The ITC applies to the total cost of solar panel installation, including the panels themselves as well as labor, accessories and equipment. This credit can be claimed for panels installed after January 1, 2006 on a primary or secondary residence located in the United States that you own. Originally set at 30% of total costs, the credit has fluctuated over time, and you may qualify for different amounts depending on when your project was completed. There is no maximum claim amount.

Reaching out to your local Aberdeen solar panel installer is the best way to learn more about how the ITC may apply to you.

In August 2022, the Inflation Reduction Act made revisions to the ITC, now titled the Clean Energy Credit. The Clean Energy Credit re-raises the credit up to 30% for solar systems installed between 2022 and 2032. After 2032, the credit percentage will be reduced slightly each year until the program expires in 2035. The expansion to the program also makes it easier to get credit for energy storage systems, starting in 2023.

More information about the new Inflation Reduction Act can be found here. To fully understand how the new Clean Energy Credit applies to you, speak with your local Aberdeen solar installers.

State & Local Solar Incentives

Some solar incentives may be offered at the local or state level. Like with federal incentives, these could include rebates, tax credits and more. Incentives may be given by the state of New Jersey, or by your county or municipality. Some incentives are available for only a limited time, while others are ongoing.

Next Steps for Installing Solar in Aberdeen

The large number of solar incentives available has enormously increased the nationwide adoption of solar energy over the last 15 years. You can get solar incentives from the New Jersey government, the federal government or your local utility company. Speaking with your local Aberdeen solar panel installation company is a great first step towards making sure you get all the incentives you qualify for when you switch to solar energy.